“I’m More Scared by a Factor of 10”: Wall Street Is Terrified to Be Left Alone with Gary Cohn’s Understudies

Fantasizing about a world in which he doesn’t lose 10 IQ points just by coming into the office.

By Tom Brenner/The New York Times/Redux.

On Tuesday afternoon, the White House lost its National Economic Council director, and America lost whatever remaining shred of hope it had for reasonable policy crafted by people who actually know what the hell they’re talking about. After 13 months of daily indignities, from working for a guy who openly defends Nazis to being forced to declare on TV that getting rid of the estate tax was all about farmers, Gary Cohn finally put his foot down and tendered his resignation. That he did so over tariffs on aluminum and steel, as opposed to, say, anti-Semitism, did not provide the best of optics—as a former Goldman Sachs partner put it to me, “He was basically saying ‘Nazis, Holocaust, fine. But fuck with my money, now you got my attention.’ If you’re going to resign in principle it would be nice if there was actually a principle there.“ But regardless of when and why he did it, the loss of Cohn has Wall Street terrified about what we can expect next. And, spoiler alert, they think it starts with an “s” and ends with a “tupid, ill-considered trade war launched by ideologues who could very well drive the economy off a cliff.”

“From a market perspective, it is hard to see Cohn’s departure in a positive light,” BlueBay Asset Management’s Timothy Ash told me. “This . . . likely means [the Trump administration] will move toward greater protectionism . . . and the conventional wisdom on trade protectionism . . . is that it does not work, is not even a zero sum game, but a lose-lose, with less global trade, and less global growth and prosperity as a result. And I think because of that the market [had] been relatively relaxed in response to Trump’s threats—they assumed that surely Trump could not be so shortsighted, or that the globalists would inevitably moderate the worst excesses of Trump. The market I think had been willing to give Trump the benefit of the doubt and indeed trade on the second scenario.” But, Ash added, Trump’s actions over the past week suggest that he’s indeed serious about following through on his worst instincts, which Cohn will no longer be around to dial back.

One financial industry veteran I spoke to said there is good reason to worry “we’re all screwed.” Not because Cohn was actually that effective in his role running interference on people like Peter “Free trade causes spousal abuse” Navarro, who has encouraged Trump to rip up whatever trade agreements he can get his hands on. But because things were already so bad to start with. “Look, I thought it was an absolute disgrace that Gary joined the administration in the first place because I think the administration is a disgrace,” this person told me. “I think what Trump is doing is insane and sure, Gary might have been a voice of reason. But I’m only marginally more scared today than I was yesterday because I don’t think he actually ended up having that much influence. What has he done? We got the terrible tax plan, Trump quit T.P.P., who knows what’s going to happen with NAFTA—really, it’s all been going really well,“ he said, the sarcasm dripping thick like a bottle of Jergens self-tanner left out on a hot day.

The former Goldman Sachs partner, on the other hand, said Cohn’s departure has left him more worried about the state of the economy “by a factor of 10.” Gary, he said “was a formidable intellect. He believed in having the economy stable, and having him as a voice was good. If you look at the people they’re thinking of replacing him with, they don’t have the half to counter what’s going on there. There’s good reason to be scared,” the former partner added. “If you go back to Obama, if Larry Summers had quit, it would have been fine, you had good people at Treasury, there were adults in the room who went to class.” As for what we’re left with? “Steve Mnuchin is simply a sycophant. Wilbur Ross is only about self-interest. And Peter Navarro’s missing a few strings on his banjo.” (Incidentally, we were reminded today Navarro made his way to the White House after Jared Kushnerbasically googled “people who can find China on a map” and offered him the job.)

And now, according to Axios, Trump doesn’t even want to wait until the staff’s had a piece of “Good Luck, Gar!” sheet cake in the break room before getting his trade war underway:

An exceedingly eager President Trump wants to launch his steel-and-aluminum salvo tomorrow, and Europe is threatening to clamp down on U.S. steel imports that get steered across the Atlantic. Not to mention on the sale of peanut butter, cranberries, orange juice, bed sheets, chewing tobacco and more.

Sleep tight, everyone!

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Carl Icahn offended by the suggestion that his decision to dump steel stocks days before Trump’s tariff announcement was anything other than impeccable timing

“Any suggestion that we had prior knowledge of the Trump administration’s announcement of new tariffs on steel imports is categorically untrue,” the billionaire investor, who dumped part of his stake in a company that relies on steel shortly before tariff-gate last Thursday, said in a statement. “We reduced our position in Manitowoc for legitimate investment reasons having nothing to do with that announcement.” Icahn, whose role as an unpaid adviser on regulatory matters saw him lobbying for just one regulation—one that happened to be weighing on one of his investments—to be scrapped, has previously suggested that he couldn’t give a rat’s ass if the advice he gave the president also helped his own bottom line. “If I think he respects me, why the hell shouldn’t I call him?” he told Bloomberg last March. “It may sound corny to you, but I think doing certain things helps the country a lot. And yeah, it helps me. I’m not apologizing for that.”

Trump’s re-election campaign is picking up the slack at Trump Tower

Quick, what do you do when no one wants to rent office space in your Midtown tower, a building on whose income you rely? If you’re Donald Trump, you charge your re-election campaign top dollar for about 100 times the square footage it actually needs. Per HuffPost:

President Donald Trump’s re-election campaign last year spent over a half-million dollars for Trump Tower offices―a choice that put donors’ money into the president’s pocket, but provided workspace for at most a handful of staff.

According to a HuffPost analysis of Federal Election Commission filings, the monthly rent was more than what candidate Trump had been charging from June 2015 to March 2016, back when he was largely self-funding his campaign and when there were, on average, several dozen employees in the Midtown Manhattan office.

And while it is unclear why Trump’s re-election campaign has rented so much room for so few people, its decision to do so has helped fill office space that appears to have become much more difficult to rent out since Trump won the presidency.

While neither the campaign nor the Trump Organization would say how much the campaign was being charged for the space, HuffPost notes that the rent on Trump tower offices “nearly quintupled, from $35,458 to $169,758 a month” from the time he locked up the G.O.P nomination to July 2016. The president has also routinely spent donor money on properties that he happens to own, paying his hotels and golf clubs hundreds of thousands of dollars to host his own fund-raisers, as well as events for the Republican party. Must be nice!